Impinj (NASDAQ:PI) executives told investors its Q4 and full-year 2025 results reflected a difficult operating environment for the RAIN RFID industry, while management positioned 2026 as a year of improving conditions after a soft start in the first quarter.
Management frames 2025 as a “tough year” for the RAIN market
Co-founder and CEO Chris Diorio said 2025 was “a tough year for our industry,” citing tariffs and tariff-related supply chain disruptions, inventory reductions across retail markets, a downward trend in apparel imports, and “protracted general merchandise adoption.” Despite those pressures, Diorio said Impinj grew year-over-year endpoint IC volumes by 9%, believes it gained endpoint IC market share, made its M800 product the “volume runner,” and launched Gen2X, which he described as “a must-have for solution success.”
Q4 results: modest revenue growth and higher gross margin
CFO Cary Baker reported Q4 revenue of $92.8 million, down 3% sequentially from $96.1 million in Q3 2025 and up 1% year-over-year from $91.6 million in Q4 2024. Full-year 2025 revenue was $361.1 million, down 1% from $366.1 million in 2024.
Endpoint IC revenue in Q4 was $75.2 million, down 5% sequentially and up 2% year-over-year. Baker said endpoint IC revenue “slightly exceeded our expectations, driven by turns orders,” and noted M800 was the volume runner with unit volumes increasing sequentially. For the full year, endpoint IC revenue declined 2% year-over-year.
Systems revenue in Q4 was $17.7 million, up 2% sequentially and up 1% year-over-year. Baker said systems revenue exceeded expectations due to non-recurring engineering (NRE) revenue, while reader and gateway revenue and reader IC revenue declined as anticipated. Full-year systems revenue grew 2% year-over-year, as reader and gateway growth more than offset declines in reader ICs and test and measurement solutions.
Q4 gross margin was 54.5%, up from 53.0% in Q3 2025 and 53.1% in Q4 2024. Baker attributed the year-over-year increase to higher endpoint IC direct margins due to a richer M800 mix, and the sequential increase primarily to higher systems direct margins driven by NRE revenue. Full-year 2025 gross margin was 55.3%, up from 54.0% in 2024, also tied primarily to an M800-rich mix.
Profitability, cash, and balance sheet
On the operating line, Baker said total Q4 operating expense was $34.2 million, with R&D expense of $18.6 million, sales and marketing expense of $8.2 million, and G&A expense of $7.4 million. Full-year 2025 operating expense totaled $130.1 million, down from $131.9 million in 2024.
Q4 adjusted EBITDA was $16.4 million, compared with $19.1 million in Q3 2025 and $15.0 million in Q4 2024, for an adjusted EBITDA margin of 17.7%. Full-year 2025 adjusted EBITDA was a record $69.6 million, up from $65.9 million in 2024, with a record adjusted EBITDA margin of 19.3%, which Baker said aligned with the company’s long-term model shared at its 2023 investor day.
Impinj posted a Q4 GAAP net loss of $1.1 million, while non-GAAP net income was $15.6 million, or $0.50 per fully diluted share. For the full year, GAAP net loss was $10.8 million, and non-GAAP net income was $64.2 million, or $2.11 per fully diluted share.
On the balance sheet, cash, cash equivalents, and investments ended Q4 at a record $279.1 million, up from $265.1 million in Q3 2025 and $239.6 million in Q4 2024. Inventory totaled $85.0 million, down $7.7 million from the prior quarter. Q4 capex was $1.5 million and free cash flow was $13.6 million. For 2025, capex totaled $12.9 million and free cash flow was $45.9 million.
Q1 outlook: revenue to fall on inventory burn-down, timing, and pricing
For Q1, management guided revenue to $71 million to $74 million, compared with $74.3 million in Q1 2025, a 2% year-over-year decrease at the midpoint. Adjusted EBITDA is expected between $1.2 million and $2.7 million, with non-GAAP net income between $2.5 million and $4.0 million, or non-GAAP EPS of $0.08 to $0.13.
Diorio said Q1 is being pressured by a “confluence” of order timing, continued retail inventory burn-down, product transitions, and a “super seasonal systems decline due to project timing,” pushing revenue lower.
Baker said endpoint IC revenue is expected to decline sequentially at a “high teens” percentage rate, driven primarily by supply chain and logistics dynamics, channel inventory reductions, retail weakness, and to a lesser extent annual endpoint IC price reductions. During Q&A, Baker quantified the moving parts behind the endpoint IC guide, saying each week of channel inventory burn-down approximates about $5 million of impact. He also said the company was modeling approximately $2 million of pricing impact in Q1, with mix impacts smaller than that.
Systems revenue is expected to decline “more than seasonally” in Q1, primarily due to enterprise project timing.
Custom endpoint IC and Gen2X: pushing toward solutions
A central theme of the call was Impinj’s push toward solution-focused selling, including enterprise-specific customization. Diorio described a custom endpoint IC developed with the company’s second-largest North American supply chain and logistics end user—an ASIC “tightly linked to their and our platforms,” with added features such as label authentication and the removal of unneeded features. Diorio said the customer plans to fully switch to the custom chip this year, and later clarified in Q&A that the chip is in production and is intended for all applications at that customer.
Management said the transition contributes to short-term order volatility, as partners reduce inventory of prior products while ramping the new IC. Baker also explained that some inlay partners built inventory ahead of annual label supplier reallocation, aided by the “fungibility” of M800 across end markets, which masked retail weakness until the quarter was unpacked in mid-January alongside channel inventory reports.
Diorio repeatedly pointed to Gen2X as a key differentiator and a driver of potential market share gains, describing it as a “toolbox” that improves performance and adds capabilities such as readability improvements and protection features. The company also said it added EM Microelectronic as a Gen2X licensee. Management characterized the EM partnership as strategic, with an “immaterial” revenue impact expected in 2026 and an initial chip (described as likely dual-frequency) “likely not available this year.”
On licensing, Baker told investors they should expect a license payment in Q2. Pricing of the custom IC was described as “to market,” with management emphasizing solution-level ROI and value rather than component-by-component pricing.
Despite Q1 softness, Diorio said the company expects conditions to improve after Q1, citing expectations that apparel demand normalizes as soon as Q2, general merchandise expands as categories add SKUs and new categories are added, food rollouts expand to more stores, and the company’s solutions efforts open new major account opportunities. He also highlighted the recent hire of Chris Hundley as EVP of Enterprise Solutions to accelerate the company’s solutions pivot.
About Impinj (NASDAQ:PI)
Impinj, Inc, headquartered in Seattle, Washington, develops Radio Frequency Identification (RFID) solutions designed to connect everyday items to the internet. Founded in 2000, the company pioneered RAIN RFID technology with a focus on transforming supply chain and inventory processes across retail, healthcare, airport baggage handling and manufacturing. Impinj’s platform comprises RAIN RFID tag chips, fixed and handheld RFID readers, gateways, antennas and connectivity modules that enable real-time visibility of tagged items.
Impinj’s product portfolio is built around its core RAIN RFID ecosystem, offering tag chips for high-volume production (Monza series), reader chips for integration into third-party devices and complete reader and gateway systems (Speedway series and xArray).
